After Budget Ď07, expectations were high on the implementation of the proposal to make Mumbai as an International Financial Centre (MIFC). An expert committee led by Percy Mistry had listed several recommendations aimed at positioning Mumbai as a major global financial port of call. Over a year later, a review of the progress made on this proposal shows that hardly any ground has been covered.

The committee recommended several macro economic measures such as reducing the fiscal deficit, the stock of public debt and adhering to the fiscal responsibility and budget management Act. But as it has found out although during the last fiscal revenue mobilisation efforts were good, the performance on the expenditure front did not match up. And it now fears that reversals are likely given the huge subsidy bill which could offset revenues which have been growing at a fair clip.

The group wanted transaction taxes to be knocked off, specially securities transaction tax and stamp duties, but it does not foresee any changes. For MIFC, it was suggested that an independent debt management unit be started by the central government. This is not new for the proposal had been mooted way back in the early part of this decade when Yashwant Sinha was the finance minister. At that time the RBI had resisted saying that the move would be contingent on the government reducing its fiscal deficit. A weak-kneed government then gave in. It appears now that a middle office will now be set up in the finance ministry.

Itís been a season of disappointment for the expert group. The financial regime governance and regulation of financial services which it talked of does not appear to on the radar of policy makers. Be it the revamp of the legal system for financial services, allowing unfettered entry of global law and accounting firms, reducing the governmentís shareholding in banks and financial firms, revamping the regulatory architecture , the progress report says that there is no political will.

Indian regulators too have also not made it easy given their approach. When it comes to many recommendations such as accelerating financial liberalisation, decontrol of branch licensing for local banks, derivative markets and operationalising a currency trading market, the central bank has had issues. This, according to a progress matrix on MIFC, is owing to the stance adopted by the RBI although in some of these cases, the finance ministry and the Sebi have appeared to have accepted the views of the group.